Consumers Skeptical of Corporate Citizenship Activities

An overwhelming majority of Americans say they consider corporate citizenship when they make purchasing decisions, according to a new survey sponsored by international public relations agency Hill & Knowlton.

An overwhelming majority of Americans (79 percent) say they consider corporate citizenship when they make purchasing decisions, according to a new survey sponsored by international public relations agency Hill & Knowlton, but only 2 percent give American corporations excellent marks for citizenship and only about a quarter rate them as “above average.”

Almost as many Americans (71 percent) say they consider corporate citizenship when they make investment decisions, according to the survey, conducted by Harris Interactive.

From a public relations perspective, the most interesting finding in the survey—consistent with other surveys conducted by H&K and others—is the high percentage of people who say they take corporate citizenship into account when making decisions. More than a third (36 percent) say it’s a serious consideration in purchasing decisions, and more than one in 10 (12 percent) say they would consider purchasing a less profitable stock because of good corporate citizenship.

These numbers may raise a few eyebrows within the business community, where there is justifiable skepticism about whether people’s actions really coincide with their responses to such questions—in part because consumers have a tendency to tell pollsters what they think they want to hear and in part because most people probably don’t have enough accurate information to act on their preference for good corporate citizenship.

But they do clearly indicate that Americans care enough about corporate citizenship to send a message to large companies, and the message is that they are disappointed in their performance in this regard. Only 27 percent rated American companies as being above average when it comes to corporate citizenship, while 73 percent rated them below average.

“I think the most interesting thing about the survey is the significant amount of cynicism that exists about the motivations of corporations,” says Harlan Teller, who heads the corporate practice at H&K. “It’s interesting to note what a small percentage of Americans think that companies in general are good corporate citizens. This finding reflects what we have seen in other studies. Americans have a fundamental mistrust of big corporations.”

That mistrust persists despite the fact that corporate giving is at an all time high—it increased more than 12 percent to $10.86 billion in 2000, according to the American Association of Fundraising Counsel’s Giving USA report.

“I think it’s a behavior issue and a communications issue,” says Teller. “First, many corporations are not doing an effective job of communicating their corporate citizenship activities. Companies spend millions of dollars to create personalities for a bar of soap. But won’t invest a fraction of that to differentiate themselves from their corporate rivals.

"The fact is that a company is nothing more than an aggregation of people, but most companies don’t act or talk in a particularly people-friendly manner, and so they are perceived as faceless institutions. They need to invest in corporate personality as well as brand personality.”

Other companies, he suggests, are simply not doing enough, or are not managing corporate giving and other good citizenship activities the right way. In particular, too many companies don’t make an effort to ensure that their giving programs are aligned with their corporate values. As a result, people are cynical about the motives behind corporate giving: only 24 percent say companies are truly committed to the causes they support, while 75 percent say they engage in corporate philanthropy to generate good publicity.

“People are not just looking at companies to throw money at a problem,” says Teller. “I think the message here is that companies need to be intimately involved with the causes they support. They need to make a commitment on a level that goes beyond cash donations. Volunteerism in particular can be a very powerful tool because it indicates a real commitment to an issue, and that the company sees its charitable work as a logical extension of its mission and its strategic business goals.”

The survey found that 59 percent of respondents were impressed when employees volunteered their time and when companies donated products and services to a cause, but only 33 percent were impressed when a CEO appeared as a spokesperson for a cause. “If a CEO suddenly appears on television to champion a cause that is far removed from a company’s sphere of influence, many people may suspect that the individual has a hidden motive—a profit motive—for engaging in the activity,” says the report.“There is no question that Americans believe companies have a responsibility to their communities,” says Teller. “But our survey findings suggest that corporations need to do more than simply give away dollars. They need to act in ways that are meaningful to their stakeholders – consumers, investors, employees, and members of the local community – and that genuinely demonstrate their core corporate values.”